Salmond spells out financial demands to Cameron

9 May 11

First Minister Alex Salmond has put greater financial powers for Holyrood at the top of his shopping list from Westminster in the wake of the Scottish National Party’s stunning victory in the Scottish Parliament elections.

By Keith Aitken in
Edinburgh

10 May 2011

First Minister Alex Salmond has put greater financial powers
for Holyrood at the top of his shopping list from Westminster in the wake of
the Scottish National Party’s stunning victory in the Scottish Parliament
elections.

In a telephone call to Prime Minister David Cameron within
hours of winning an unprecedented overall majority of MSPs, Salmond set out his
list of financial demands. They include accelerated transfer of capital
borrowing powers under the Scotland Bill, control over the Crown Estate
Commission and devolution of corporation tax.

Although Cameron made no immediate response, a concession on
corporation tax is unlikely. The UK government is consulting on devolving this
power to Northern Ireland to level the inward investment playing field with the
Irish Republic, but does not appear sympathetic to extending the principle to
Scotland.

There have been hints, however, that new borrowing powers
could be in place next year, a year earlier than initially envisaged, and
Scottish Ministers are pressing hard on the Crown Estate, which collects
revenue from offshore marine resources.

The SNP sees dominance of next-generation renewable energy,
much of which is expected to be generated offshore, as vital to Scotland’s
economic resurgence.

Finance Secretary John Swinney said: ‘The Scottish
Parliament needs to gain responsibility for the Crown Estate and Scotland’s
£195 Fossil Fuel Levy surplus must be released now, as additional spending, so
that we can reindustrialise Scotland by achieving our green energy potential.’

The SNP is impatient to press home its advantage after last
Thursday’s election landslide. But the emphasis on financial powers also shifts
attention from pressure on Salmond to specify an early independence referendum
– a vote that polls suggest he would currently lose despite last week’s
election triumph.

The first minister is committed to holding a referendum
within the new five-year parliamentary term, but is thought to be reluctant to
do so soon. He also indicated at the
weekend that he was willing to offer the other parties a third option on the
voting paper, that of fiscal autonomy within the UK.

Meanwhile, the promise of enhanced borrowing powers has
brought a plea from a leading public finance academic for the new SNP
government to eschew ‘big ticket’ capital projects. Richard Kerley, professor
of management at Queen Margaret University, Edinburgh, said more would be
gained by dispersing expenditure on less glamorous, but important, local needs.

2015 Public Finance. Public Finance is published on behalf of the Chartered Institute of Public Finance and Accountancy by Redactive Publishing Ltd. All rights reserved. Reproduction of any part is not allowed without written permission. Redactive, 17-18 Britton Street, London, EC1M 5TP